Abstract
The purpose of the paper is to explain ethical principles, which every accountant of the organization should follow. Professional accountants throughout the world have an important role in society. The state (government), investors, creditors, employers and the general population are users of economic information, formed by professional accountants. Professional approach and behavior of professional accountants in the provision of such services affect the economic well-being of the whole country. Consequently, the accounting profession is of public concern. It imposes an obligation on professional accountants, responsible for the public interest. The duties of a professional accountant meet the needs of not only an individual client or employer, but also the whole society. Several factors, which cause specific requirements for the ethics of the accountant, were considered. General ethical principles for all accounting employees, regardless of industry sector or the legal form of organization, in which they operate, were formulated.
Introduction
Ethics is a code of conduct applicable to everyday life. It defines right and wrong actions. Ethical behavior is the result of individual decisions. People face many ethical situations every day. Professional ethics is a code of conduct applicable to professional practice. As well as the ethical standards of the company, professional ethical standards are a set of actions of individuals. As representatives of the occupation, accountants are responsible for maintaining the highest ethical standards not only before their employees and customers, but also to society as a whole. Every person becoming an accountant is responsible for maintaining the high standards of the occupation, regardless of the field of accounting, in which the person is involved in (Duska, Duska and Ragatz, 2011).
Ethical Principles, which Accountant Follows
Ethics in accounting is of paramount significance for the accounting experts and those, who depend on their services. Certified Public Accountants (CPA) and other accounting experts recognize that individuals, who apply their services, specifically the decision-makers, who use financial reports, expect that they will be very skilled, dependable and unprejudiced. Those, who work in the accounting sphere, should not just be highly competent, but additionally should have a noticeable level of professional integrity. A good professional reputation is one of the most essential properties (Drury, 2015).
Specific requirements for the ethics of the accountant caused by several factors include:
Having large amounts of private information, disclosure or improper use, which may result in material damage of the organization and its employees (Drury, 2015);
Direct participation in the formation and management of cash flows and the movement of other types of property (Duska, Duska and Ragatz, 2011);
Constant communication with the workforce on the issues of not only the industrial character, direct involvement in the development of internal regulations affecting the interests of the entire staff of the organization (the form and the wage system, the collective agreement, provision for bonuses, regulation of labor, etc.); the possibility of a dispute with the management of the organization on issues related to cash flow; regular contacts with the tax and other regulatory authorities on the issues of a special nature and solved usually with minimal management of the organization (Klein, 2015);
Work in a team (or team leadership) of employees, whose work is related to the probability of errors that lead to material losses and penalties (Drury, 2015).
Based on the above, general ethical principles for all accounting employees, regardless of industry sector or the legal form of organization, in which they work, can be formulated. The main ethical principles are the following:
Integrity in professional activity is usually manifested in an attempt to obtain personal benefit to the detriment of the interests of the organization by violating laws or regulations. The organization of accounting involves the creation and the existence of multi-level control system of correct performance of accounts. Such a system should ideally mean that any manifestation of dishonesty is exposed. This entails immediate professional discredit of the expert, as well as the application of measures of material, administrative and criminal liability (Duska, Duska and Ragatz, 2011).
Objectivity is required for the accountant in the relationships with the employees of the organization. The principle of objectivity means that equal conditions should be created to all workers, regardless of their employment status, personal relationships and other factors, which under normal circumstances can cause bias (Klein, 2015).
Fidelity to principle is needed, when working with the organization’s management and supervisory bodies. The legislation sets almost the same responsibility of the head and the chief accountant in the case of the violations of legislative and other acts. However, the qualification requirements for accountants are such that in front of him/her in the long run there is challenge to ensure an exact match of the operations with legal requirements. In other words, when the management tries to conduct an operation, which is contrary to applicable laws or risk of which is too large, the accountant should find arguments to prevent this (Drury, 2015).
The ability to keep a trade secret. As already mentioned, by the nature of his/her activities, the accountant has access to large volumes of information, which in the case of improper or selfish use can significantly worsen the financial performance of the organization activities or even bring it to bankruptcy. Disclosure of confidential information may either inadvertently happen or as a result of wrongful acts of an accountant, aimed at obtaining personal gain. Sometimes the disclosure of such information is due to a sharp deterioration in relations with the leadership of the organization (in particular, the alleged or actual dismissal accountant). In this case, it is necessary to consider the fact that the disclosure of confidential information could cause harm not only to the actual perpetrators of the differences, but also the entire organization (Klein, 2015).
Professional and conscientious performance of duties. In practice, this quality manifests itself in the clear knowledge, timely and complete fulfillment of their duties, as well as in the constant self-improvement and professional development (including through self-study).
In addition to these ethical standards and rules, a professional accountant in daily activities and dealing with people must adhere to general ethical principles such as respect for the value and dignity of the individual, tolerance, openness, commitment, etc. (Duska, Duska and Ragatz, 2011).
Conclusion
Accountant is a company employee, who accepts and processes the primary documents, performs current record of business transactions and also provides financial and other reporting. Accountants should be professionally competent, honest, fair, objective, confidential and with patriotic attitude to their profession. He/she must comply with ethical and professional requirements for the accounting officer. Ethics of accountant is designed to ensure coordination of his/her personal conduct and the extent of responsibility that objectively characterize the profession. Ethical standards set moral criteria that every accountant in the course of his/her professional activity should guide and be obliged to follow.
References
Duska, R., Duska, B. Sh. and Ragatz, J. A. (2011). Accounting Ethics. 2nd ed. Hoboken, New Jersey:Wiley-Blackwell.
Drury, C. (2015). Management and Cost Accounting, 9th revised ed. Boston: Cengage Learning EMEA.
Klein, G. (2015). Ethics in Accounting: A Decision-Making Approach. Hoboken, New Jersey: Wiley.
